Why energy bills will be one of the big issues of the autumn

whatawaste

When I read this earlier today, I thought that it was bad as any stealth tax dreamt up by Gordon Brown. My final thought though wass that nothing would be done to rectify this rip off, although I am sure that lessons will be learnt...

But the long term impact on the economy will be severe as energy prices are set to rise and rise, as the consumers are providing the means to build the new nuclear power stations. Why do I have this funny feeling that this idea is not going to pan out?

Banquosghost

But...but.... its all a load of canine danglies!
The entire 'green' industry appears to have the sole aim of raising cash. Its got eff all to do with the environment and profit seeking entities are not stupid, they will seek out each and every opportunity within some insane government legislation to make money. Cant blame them for doing that, its the stupidity of making legislation that punishes the public for an absurd 'green' ideal.
And another deeply distressing consequence the whole carbon footprint crap has been the opportunity for beardies and students everywhere another reason to pontificate desperately about stuff they dont understand but have the moral certainty that they are right. Yet another sandal wearing iq light individual banging on about how important it is that I change my lightbulbs from a 60 watt to something which when switched on makes the room darker!!

(walks off muttering, 'ucking students)

whatawaste

Oh and coming to you soon is another rip off: smart meters which cost you an arm and a leg to install. The benefits surprise surprise have been massively overstated.

Nicholas

When this issue blows up in the faces of our arrogant political elite, as it will - like the poll tax, they will deserve everything they get. The idea of ordinary, low-income families being squeezed as the victims between the government's ridiculous green tax policies and greedy utility companies is nothing short of obscene.

david

There are three reasons why our energy costs are so high: privatisation, privatisation, privatisation. When the last Conservative government handed our energy supply industry over to the international oil companies, they committed the greatest criminal conspiracy to defraud the British people ever devised, abetted by the last Labour government who made the situation worse.

The Gas price linked to oil, why? Before privatisation it wasn't, why is it now?

National Grid Transco, owned by the electricity industry with a vested interest in ensuring that domestic gas prices remain high, so they can continue to burn cheap gas in their power stations.

The political party that promises to take our energy industry back into the public sector, will win the next election with a landslide, such is the hatred of the British people for the energy companies.

Dennis Churchill

James Delingpole over at the Telegraph has an interesting Blog on the theory that it is cosmic rays from the Sun that cause the warming and cooling cycles of the Earth rather than carbon usage.
Naturally there is so much credibility tied up in Man Made Global Warming that this theory is not going to get much publicity, particularly in the BBC/Guardian.

startledcod

The renewable energy policy of this and the previous Governments are ludicrous. Their obsession with wind power which is expensive and unreliable is bordering on the negligent. It is Government's responsibility to plan for and provide secure cheap energy, the last Government failed and this Government, with a huge helping hand from the loony-toon Liberal Democrats seems to be failing as well. Their policy will achieve nothing for the environment as it is/will drive industry away to where there are fewer enviro-rules. What is more, when a Minister or campaigner bleast about fuel poverty or a prensioner dies there will never be an acceptance that policy has contributed.

Rhoda Klapp

You know, this could be found in many general blogs any time these last two years, and in specialist blogs for years before this set of taxes came in. It really is not good enough to find it in the Times and direct us to it as if most of us did not already know, and our prior knowledge which we though we had is only validated by its appearance there and here. We've been trying to tell you, because serious people read here. Why can't you get to the curve, never mind ahead of it. Get a grip. this matters more than all the antics of press hackers, Mandy, Clegg and all the other non-entities you are all obsessed with at the Spect.

when the English Spring comes, will the Spectator run an article wondering why we didn't see it coming?

Alex

"Among Tory MPs, there’s mounting concern that the coalition’s green policies are driving up the price of energy rather than helping to bring it down."
Hilarious. Nobody with any understanding of economics, or indeed a pinch of common sense, ever expected otherwise.
The whole point of 'green policies' are to force everyone to do things that aren't the most economically efficient. The justification is external costs (e.g. climate change). Now there is an argument to be had about how much we should be doing to avoid CC but to express surprise that green policies have pushed up energy prices is either moronic or dishonest.

Publius

Next you'll be telling us that MPs are starting to realise that the Pope is Catholic.

Richard Spain

Banquosghost
August 27th, 2011 4:39pm

Frankly, I couldn't put it better myself. Congratulations.

Richard Spain

The basic problem is, of course, that the government (also in the U.S.A. and E.U.) are giving enormous subsidies to encourage people to do things which are absolutely uneconomic, ridiculous, inefficient, non-productive, and wasteful like install windmills and solar panels. If they HAVE to take this money off us in taxes, at least they could put it towards something that works and is economical like nuclear power, which is about the best we have to offer at the moment.

Frank P

Mr Forsyth

Further proof that you do not read CH-ers comments is that the headline to this post indicates the future tense. It has been a 'big issue' now for several years and seems to have worsened since the current administration took office - and I use the word 'took' advisedly, they certainly were not given office by a sufficient majority to deserve it. Unless they do something about the iniquitous extortion by the fuel and energy companies soon, the recent riots will seem like a vicars tea-party by comparison. The whole AGM/Carbon Trading scam has facilitated some of the worst organised crime that I have witnessed in my lifetime.
I have to say that your namesake Bruce has more political acumen under his Irish jig than the political editor of the New Specstatesman. Obviously you are immune from the gouging that is going on. Will be an issue, indeed.

Axstane

Compliments to Rhoda for expressing our total lack of surprise at this stunning announcement. She is also correct in asking why you do not read the comments we have left here over the years. We have told you this, repeatedly.

Carbon trading is a ridiculous scammimg exercise with no point except to allow some few to get rich on the fallen fruits of the Great Green Tree.

We have also told you that windmills cannot produce energy efficiently. In times of yore these were erected only where fast-running streams or rivers that could be dammed did not exist. Water power was more reliable and worked 365 days a year.

Later still steam engines were harnesed to do the millers work, to drive
the forge hammers, to power the lathes.

Consult any relatively reliable source [such as the US Department of Energy] and you will find that offshore turbines are the second most expensive manner of power production - after solar thermal with photo-voltaic cells in third place.

William Blakes Ghost

Green energy policy is the most outrageous piece of political malevolence that is currently being imposed on the British people. Whirly-gigs and stealth tax measures (think of all the VAT the treasury will get from these energy price rises) make this government no better than Brown's

I had thought and hoped that it would be Labour who would be in trouble in 2015 but given Cameron's constant pandering to the delusional lunacy of the Libdems it could well be the Conservative Party. The thing is if they continue with this madness then they deserve to lose every damn seat!

normanc

Agree with the above comments.

To ask us to believe that only now MPs are realising that building useless, very expensive windmills isn't an energy panacea is asking to believe that either MPs are far, far more ignorant than what we suppose (and I, for one, don't hold them in high regard in the first place) or that they are cottoning on to the fact that this is going to be a massive vote loser so are trying to make themselves appear more ignorant than they are (a near impossible task).

JohnOfEnfield

First it was Livingstone's precept going up at fifteen percent per annum (before inflation)

Then it was Council tax doubling over ten years.

We voted New Labour out because of this and Brown's stealth taxes.

We then had the New Labour time-bomb to reduce our carbon emissions by some fantastic figure by 2050 by fiat.

Now we propose to double Gas & Electricity prices by 2020.

Huhne is completely committed to this new religion. But it has no basis in Science - there is absolutely no accepted proof that CO2 does anything than benefit the environment. AGW a socialist myth to increase taxes and control the populace. If you are going to demand extraordinary action - you need extraordinary proof. There isn't any such proof.

If this greenery is not removed from our tax structure and laws we will continue to stumble economically and to continue to vote the government of the day out of office.

Just see what is happening in the US Presidential race. Perry has uttered the wonderful words "Look, look, the Emperor has no clothes".

oldtimer

It has been obvious to anyone who has followed this since Climategate (in 2009), and some even before, that the green policies, Climate Change Act and now the Carbon Plan, are a scam. It is the outstanding 21st C example of The Big Lie, so eloquently described by Dr Goebbels, the arch propagandist.

There is no basis in science for CAGW. Even the Met Office does not claim this, though you have to dig deep into its web site to discover these doubts. They might just as well have saved us all a lot of money by slaughtering a chicken and consulting its entrails before making a pronouncement about the chances of global warming instead of spending millions of pounds on computer programmes. As they themselves admit, "some variations in climate are inherently unpredictable"; "we evaluate climate model output using measurements which have errors"; "we only have plausible storylines of how anthropogenic emissions might evolve"; "we have limited computer resources and an imperfect knowledge of the Earth system..."

What is not implausible is the cost of the carbon scam, the feed in tariffs and the millions that those fortunate enough to own large tracts of land will earn if they plant a money spinning wind farm on it. As Private Eye might put it: step forward Mr Cameron`s father-in-law. The rest of us must pay the price. It is all too real.

MilibandE, Cameron, Clegg and Huhne all deserve the sack.

DeeJay

I was amused by the energy company spokesperson who claimed prices had to rise because consumers are now using less!

Hard Hearted Romantic Perry

I wonder if the ramshackle grouping that style themselves ‘government’ are really crafty scheming agents of the EUSSR or absolute blockheads.

Either way, these same tiresome subjects recur over and over. Are they (the ‘government’) trying wear down anyone with the ability to think straight so they become numbskulls like themselves, or are they really as dim-witted, egocentric, self-preening and stupid as their actions indicate? Whatever, we may be sure they are getting adequate recompense from somewhere.

We surely are not.

DITCH THE STUPID 'GREEN' SCAM!

Frank P

I wonder whether the decision on whether or not to prosecute Huhne over his wife's allegations about penalty points has anything to do with the fact that he is a key co-conspirator in the carbon trading scam and knows just where the truffles are buried?

2trueblue

Like everything that affects the public our MPs are way behind the curve, they have no idea how the rest of us have to manage. They are totally insulated by their expenses and their privileged backgrounds/wealth. Wind turbines are inefficient, costly and ugly.
Energy is already a problem for every family, filling the car costs more than the mortgage, we have autumnal weather and already thinking of putting on some heating. The religion of 'climate change' is not proven and is a scam.

In2minds

It's all very well Tory MPs being 'concerned' about this but for one thing, their boss, gormless Dave, actually wants green policies. He's as bad as that fool Huhne. Tory MPs should have thought this through. That is get another leader or stop backing this one.

John B (UK)

Although I have always voted Conservative, I have recently been examining the UKIP manifesto, and frankly it reads like a "true blue" Conservative one should - no more windmills, sensible controls on immigration, no more funding the EU...etc.

Although sadly I think its unlikely that they will form a government in 2015, I can't vote Labour after the last fiasco, would never vote Liberal, and given this current Conservative obsession with spending £100bn of our money on windmills, I don't think I'll vote Conservative again either.

So unless something changes dramatically, my next vote will be UKIP.

Trapped

@ David -

"The political party that promises to take our energy industry back into the public sector, will win the next election with a landslide, such is the hatred of the British people for the energy companies."

I've been advocating this myself for quite some time too. There's a debate needed on what the government should and should not provide. It should not provide interference with employers over 'elf and saftee regs. But it damn well should regulate and ensure that energy, water, and the primary basics of life within a country are affordable and available to all. Frankly privatising the power companies has given us the worst of every possible world at once, get them back into a national company as quick as possible, pump the profits into infrastructure instead of the shareholders jockstraps and bring the country back from the rather archaic energy patchwork system we still use. What's more, I bet the power generation could be more green AND prices would be lower to boot.

papagray

has anyone looked into whom actually owns the wholesale companies?
or whom they have links with?
seems when profit drops the price goes up??
just a general enquiry

Mark M

Watching some Friedman videos on youtube, you see that these 'trading permit' schemes are nearly always bad for the consumer. I am willing to bet that there are people who make a very good living trading these carbon allowance without ever owning a power plant.

As for renationalisation, if you actually get into the detail and read the regulation, the power companies are effectively nationalised anyway. There's so little wiggle room in what the regulator will allow them to do. Privatisation didn't work because government bring itself to trust market forces. I don't know whether a free market in energy would work, but I'd love to see actually be allowed to try.

TomTom

"has anyone looked into whom actually owns the wholesale companies?"

What wholesale companies ? There are generators and distributors such as National Grid and YEDL - all are shareholder-owned but Government-regulated.

The problem is Government which since privatisation conspired against consumers to let private companies make large profits with little regulation unlike in Germany or the USA. There is no Public Utilities Commission as in the US simply a patsy granting price increases in return for pledges to build power stations whether windmills, gas, or nuclear depending upon political whim

It is backdoor taxation unlike in any other OECD country because Britain is "Treasure Island" and its very dim peasant population accepts being fleeced

Kittler

Gas supply in Scotland is and should be for decades, the byproduct of nearby offshore oil extraction. It is delivered by long established infrastructure. The cost of operating that is stable.
But we do not pay that "real" price. We pay a mysterious "market" price - probably in fact determined by the Governments of major supplying states like Russia. But that is what happens when you surrender your resources to global commerce and distant government.

TomTom

"Scotland Gas Networks covers the whole of Scotland and Southern Gas Networks covers the south and south east of England. We provide a safe and secure supply of natural gas to 5.8 million customers through 74,000km of gas mains and services.

Formed in June 2005, we have three shareholders consisting of UK based SSE plc (50%) and two Canadian pension funds, Borealis Infrastructure Management Inc (25%) and Ontario Teacher's Pension Plan Board (25%)."

Kittler

Thanks for the info TT. I had more in mind the offshore extractive infrastructure.

El Sid

@david - with the greatest respect, you don't have a clue about the energy supply industry. The "international oil industry" played virtually no role in the privatisation of the UK electricity and gas industry. National Grid has been listed on the stock market since the mid-90s, the RECs did retain stakes but almost all sold them within months of the privatisation. The Transco name disappeared in 2005. They did sell off half the local gas networks, but they ended up mostly with financial buyers like Macquarie and pension funds, although SSE does have a stake in the gas networks in their patch.

The NBP trading system that was brought in after privatisation is actually one of the more transparent systems of gas pricing in the world. It's not linked to the oil price directly, unlike gas in most of continental Europe. Partly that's a historical legacy in Europe - traditionally gas pipelines were not interlinked, so a particular gas market acted as a closed system and they needed some kind of external reference point for pricing, particularly when gas was being traded across the Iron Curtain.

The real problem in UK energy is the collapse in domestic production. In 2005 we were still a gas exporter, by 2015 we will be importing 70-80% of our gas. Mostly that's just a geological fact of life, although tax rises and prices that were too low haven't helped. But that means we are now moving from our prices being set domestically to having to compete for energy from the world market - that will always be a big macroeconomic shock, even if people try to explain it in terms of microeconomics or even politics. That market is particularly tight at the moment, as the Japanese are burning all the gas they can get to make up for their nukes being offline.

El Sid

@Kittler - Russia is not a major supplying state for the UK. It's all very well having 20% of your supply coming from long-established infrastructure (although increasingly our homegrown gas will have to come from "new" infrastructure West of Shetland). You still have to buy the remaining 80% from somewhere - either that or reduce your gas consumption by 80%. We're increasingly reliant on import sources such as LNG, and our prices have to reflect that. The current price is about 55p/therm (about half the price per unit of energy compared to oil) - during summer we can rely on "local" sources like domestic production and the pipe from Norway. But during winter we will need to import huge amounts of LNG to cover peak demand - already 20% of our annual gas now comes from just outside Iranian territorial waters. The current spot price for LNG is about 90p/therm - and it's hard to argue that it's being fixed too much, when the two sides of the LNG market have relatively little cross-ownership. Unless you're going to argue that Bilderberg control both the Qatari government and Tokyo Power!

Coffeehousers spend waay too much time on the climate change thing when they need to be thinking about the real issue for the UK over the next 5-10 years - energy security. Just ask Japan and Ukraine how that can go wrong. For a starter, 20% of our gas now comes from just outside Iranian territorial waters, and declining gas production will leave our energy supply ever more vulnerable to geopolitics. We can't rely on any one source of energy (ask Japan), everything from nukes to wind to wave will play a role - and they will all be more expensive than the current £50/MWh wholesale price. So prices are going up regardless of who owns our utilities. Wind can be our cheapest form of electricity - some onshore windmills are turning a profit at £28/MWh but now the best sites have been built out new onshore wind come onstream at about £70-80/MWh. Thing is with wind, there's lots of upfront capex but running costs are minimal, so you know you'll be paying £70/MWh for 25 years. The cost of fossil fuel power is more in the opex than capex, you need to take a view on what will happen to fossil fuel prices over the next 25 years. So it's simplistic to just look at the current price of wind and compare it to the current price of gas-fuelled stations, you need to look at prices and security of supply over the next 25+ years. The market isn't very good at looking that far ahead (as just one example, liquidity on gas futures dries up once you start looking more than 2 years ahead), so you can justify having some kind of subsidies (not necessarily in the current form) on the grounds of adjusting for the market's inefficiency without any need to invoke climate change.

El Sid

@Axstane - for recent figures that are applicable to the UK, see Arup's recent report for DECC, "Review of the generation costs and deployment potential of renewable electricity technologies in the UK
Study Report". Typical solar PV, geothermal, tidal and wave all come in at over £200/MWh, average offshore wind is £174/MWh. I recommend everyone interested in this stuff to have a good read of that report. You can quibble about some of the numbers in detail, but they're broadly OK.

http://www.decc.gov.uk/en/content/cms/meeting_energy/renewable_ener/renew_obs/renew_obs.aspx

oldtimer

El Sid has appeared from nowhere to extol the virtues of wind power. I wonder what he has been smoking? As for decc being the fount of all wisdom of matters to do with energy, I think we can forget that.

Ken

Now the UN/EU-imposed watermelon energy policies have been soundly shown up for the expensive scam they are, how about some lateral thinking? Thorium comes to mind.
http://dlvr.it/jC6Vy

El Sid

Ah yes oldtimer, ad hominem attacks are always the first resort of the clueless. FWIW I've certainly been posting here under this name since 24th October 2008, probably a bit before that. I've not been smoking anything, perhaps you have if you dismiss the analysis of Arup so lightly, one of the world's leading consulting engineers. Which bits of their report do you disagree with, have you read it? Or is your analysis "La, la, la, I know best despite having no relevant expertise?"

All I can say is that having spoken to a number of wind farm developers, they all seem to be coming in at around £70-80/MWh for new onshore wind projects at the moment. But it's a matter of record that in 1998, 340MW of onshore wind was bid at between £24.30 and £31/MWh in NFFO 5. They wouldn't have bid if they didn't think they could make money at those prices, although that was obviously the best, most windy sites. Their costs won't have changed much in the last decade, but you certainly can't generate electricity from gas or coal at those prices these days.

@Ken - thorium hardly counts as lateral thinking these days. :-) The obvious places for it would have been energy-hungry countries with lots of R&D capability and no requirement for making bombs - in other words Japan and Germany. It might still happen in one of those two, but it now looks much less likely, people will just freak at the mention of fission regardless of the actual merits.

For a country like the UK, the economics are complicated as long as you have a requirement for a sovereign feed of material going into Aldermaston. I've not seen anyone try to put a figure on it, but I suspect that for the UK, by the time you've got a foodchain in place for Aldermaston, it's probably cheaper to just use that existing "hot" infrastructure than to build a whole separate infrastructure for thorium. We've got too many designs of nukes as it is.... But it certainly looks like thorium will happen in other countries at some point.

Baron

On three occasions last year when the wind farms were needed, the three largest managed to supply at around 3% of the stated output. If there ever was a disaster waiting to happen the wind farm idiocy it is.

El Sid, sir, you can roll, shape your musings into a neat cone, stick them.

oldtimer

El Sid @12:46am

Apologies for not realising you have posted here before.

As for Ove Arup I have no doubt they they have done a professional job within the terms of reference provided by them to decc. This I note is entirely within the context of potential alternative sources of renewable energy. The fact of the study does not, of itself, mean that renewable energy provides the answers.

I have been attempting for several months, via my MP, to establish what studies the government has made into the effectiveness of renewable energy schemes in Denmark, Germany and Spain. To date this has been met with a blank refusal to reply to the question.

I do note that the Muir Trust did make a study of the effectiveness of windpower and found it wanting. In Spain the Universidad Rey San Carlos studied the effectiveness of wind farm subsidies and concluded they were ineffective. The Carbon Plan, signed off by Cameron/Clegg/Huhne, admits that windfarm capacity must be duplicated (by fossil fuelled or nuclear fuelled stations) in order to assure electricity supply. It seems that wind farm operators are compensated if the wind blows too hard. The CEO of the National Grid sounds none too confident about assuring future uninterrupted supplies based on renewables. Thus the evidence I have seen does not inspire confidence that renewables will work as advertised. They will certainly make the cost of energy in this country uncompetitive if the government pursues its present course.

AliC

This crap would have been significantly mitigated had Liebore faced the music 13 years ago (as told to Liebore by experts and the energy suppliers) and sanctioned building of more nuclear power stations.

Wind is blowing, but it's not for energy. It's empty wind from 'the green lobby'. who are in it to punish and make money AFAIK. Do you see any French wind farms? non.... just lots of efficient nuclear power stations............. Carbon trading is just lies. it's like the Guardian's 1980s fish farts all over again.

David Hinde

The Yorkshire Wolds are being raped by these Wind Turbine Developers.
Stop this lunacy now-save Englands High Quality Landscapes,heritage & tourism assets from these montrosities.
Government You need to Act NOW.